-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ADVb625pj8SlZ9k/44Bk0SyIM9H0hMYdsbYt3sSeFCpUtGqvf71h09GUy9htz++P /C2KXpDmo7zN5UssDfejJA== 0000906280-94-000007.txt : 19940215 0000906280-94-000007.hdr.sgml : 19940215 ACCESSION NUMBER: 0000906280-94-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELCHAMPS INC CENTRAL INDEX KEY: 0000729970 STANDARD INDUSTRIAL CLASSIFICATION: 5411 IRS NUMBER: 630245434 STATE OF INCORPORATION: AL FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 000-12923 FILM NUMBER: 94507229 BUSINESS ADDRESS: STREET 1: 305 DELCHAMPS DR STREET 2: P O BOX 1668 CITY: MOBILE STATE: AL ZIP: 36602 BUSINESS PHONE: 2054330431 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the 13-Week Period Ended January 1, 1994 Commission File Number 0-12923 Delchamps, Inc. ----------------------------------------- (Exact name of registrant as specified in its charter) Alabama 63-0245434 - ------------------------------- ------------------------------- (State or other jurisdiction of (I.R.S. employer incorporation or organization) Identification Number) 305 Delchamps Drive, Mobile, AL 36602 - ------------------------------- ------------------------------- (Address of principal executive (Zip Code) offices) (205) 433-0431 - ------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ----- --------- Indicate the number of shares outstanding of each of the issuer's classes of common stock as of the latest practicable date. 7,113,581 shares at January 31, 1994. 2 DELCHAMPS, INC. AND SUBSIDIARY INDEX Page No. -------- Part 1. Financial Information Item 1. Financial Statements Condensed Balance Sheets - January 1, 1994 and July 3, 1993 3-4 Condensed Statements of Earnings - Thirteen Weeks Ended January 1, 1994 and December 26, 1992 5-6 Twenty-six Weeks Ended January 1, 1994 and December 26, 1992 5-6 Condensed Statements of Cash Flows - Thirteen Weeks Ended January 1, 1994 and December 26, 1992 7-8 Twenty-six Weeks Ended January 1, 1994 and December 26, 1992 7-8 Notes to Condensed Financial Statements 9 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 10-11 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 12 Signatures 12 3-4
Part I. Financial Information DELCHAMPS, INC. AND SUBSIDIARY Condensed Balance Sheets - (In thousands) (Unaudited) January 1, 1994 July 3, 1993 * _______________ _______________ Amount % Assets Amount % Assets ASSETS ______ Current assets: Cash and cash equivalents $17,305 6.65 12,070 4.79 Trade accounts receivable 9,663 3.71 7,941 3.15 Merchandise inventories 101,037 38.82 97,083 38.52 Prepaid expenses 2,622 1.01 1,242 0.49 Deferred income taxes 1,976 0.75 2,129 0.84 _______ _____ _______ ______ Total current assets 132,603 50.94 120,465 47.79 Property and equipment: Land 6,352 2.44 6,495 2.58 Buildings and improvements 51,119 19.64 49,492 19.64 Fixtures and equipment 189,798 72.92 185,211 73.48 Construction in progress 2,221 0.85 3,339 1.32 _______ _____ _______ ______ 249,490 95.85 244,537 97.02 Less accumulated depreciation and amortization (129,475) (49.74) (120,271) (47.72) _______ _____ _______ ______ Net property and equipment 120,015 46.11 124,266 49.30 Other assets 2,387 0.92 1,954 0.78 Goodwill 5,288 2.03 5,367 2.13 _______ _____ _______ ______ Total assets $260,293 100.00 252,052 100.00 ======== ====== ======= ====== LIABILITES AND STOCKHOLDERS' EQUITY ___________________________________ Current liabilities: Notes payable $9,370 3.60 3,847 1.53 Current portion of obligations under capital leases 1,705 0.66 1,705 0.68 Current portion of long-term debt 3,760 1.44 3,759 1.49 Current portion of guaranteed ESOP debt 2,000 0.77 2,000 0.79 Accounts payable 44,256 17.00 39,785 15.78 Accrued expenses 15,623 6.00 18,427 7.31 Income taxes 969 0.37 1,431 0.57 _______ _____ _______ ______ Total current liabilities 77,683 29.84 70,954 28.15 Obligations under capital leases, excluding current portion 12,560 4.83 13,387 5.31 Long-term debt, excluding current portion 20,236 7.77 22,116 8.77 Guaranteed ESOP debt, excluding current portion 4,000 1.54 4,000 1.59 Deferred income taxes 14,112 5.42 14,785 5.87 Other liabilities 495 0.19 548 0.22 _______ _____ _______ ______ Total liabilities 129,086 49.59 125,790 49.91 Stockholders' equity: Junior participating preferred stock of no par value - authorized 5,000,000 shares; no shares issued - - - - Common stock of $.01 par value - authorized 25,000,000 shares; issued 7,113,581 shares 71 0.03 71 0.03 Additional paid-in capital 19,731 7.58 19,731 7.83 Retained earnings 118,449 45.51 113,611 45.07 _______ _____ _______ ______ Total stockholders' equity 138,251 53.11 133,413 52.93 Less: Guaranteed ESOP debt Unamortized restricted (6,000) (2.31) (6,000) (2.38) stock awards (1,044) (0.40) (1,151) (0.46) _______ _____ _______ ______ Total stockholders' equity 131,207 50.41 126,262 50.09 Total liabilities and stockholders' equity $260,293 100.00 252,052 100.00 ======= ====== ======= ======
See accompanying notes to condensed financial statements. *Condensed from Balance Sheet included in the 1993 Annual Report. 5-6
DELCHAMPS, INC. AND SUBSIDIARY Condensed Statements of Earnings - (In thousands except per share amounts) (Unaudited) Thirteen Weeks Ended Twenty-six Weeks Ended _____________________________________ ____________________________________ January 1, 1994 December 26, 1992 January 1, 1994 December 26, 1992 _______________ _________________ _______________ _________________ Amount %Sales Amount %Sales Amount %Sales Amount %Sales ______ ______ ______ ______ ______ ______ ______ ______ Sales $274,506 100.00 250,228 100.00 541,076 100.00 505,602 100.00 Cost of sales 207,139 75.46 184,915 73.90 404,949 74.84 376,589 74.48 _______ ______ _______ ______ _______ ______ _______ ______ Gross profit 67,367 24.54 65,313 26.10 136,127 25.16 129,013 25.52 Selling, general and administrative expense 62,557 22.79 58,344 23.32 125,176 23.13 116,018 22.95 _______ ______ _______ ______ _______ ______ _______ ______ Operating income 4,810 1.75 6,969 2.79 10,951 2.02 12,995 2.57 Other expense 1,023 0.37 1,353 0.54 2,071 0.38 2,673 0.53 _______ ______ _______ ______ _______ ______ _______ _____ Earnings before income taxes and cumulative effect of change in accounting for income taxes 3,787 1.38 5,616 2.24 8,880 1.64 10,322 2.04 Income taxes 1,316 0.48 2,088 0.83 3,188 0.59 3,796 0.75 _______ ______ _______ ______ _______ ______ _______ ______ Earnings before cumulative effect of change in accounting for income taxes 2,471 0.90 3,528 1.41 5,692 1.05 6,526 1.29 Cumulative effect of change in accounting for income taxes - - - - 900 0.17 - - _______ ______ _______ ______ _______ ______ _______ ______ Net earnings $ 2,471 0.90 3,528 1.41 6,592 1.22 6,526 1.29 ======= ====== ======= ====== ======= ====== ======= ====== Earnings per common share: Earnings before cumulative effect of change in accounting for income taxes $ 0.35 0.50 0.80 0.92 Cumulative effect of change in accounting for income taxes - - 0.13 - _______ _______ _______ ______ Net earnings per common share $ 0.35 0.50 0.93 0.92 ======= ======= ======= ====== Weighted average number of common shares 7,114 7,114 7,114 7,114 ======= ======= ======= ====== Dividends declared per common share $ 0.11 0.11 0.22 0.22 ======= ======= ======= ======
See accompanying notes to condensed financial statements. 7-8 DELCHAMPS, INC. AND SUBSIDIARY Condensed Statements of Cash Flows - (In thousands) Increase (Decrease) in Cash and Cash Equivalents -(Unaudited)
Thirteen Weeks Ended Twenty-six Weeks Ended _______________________ ________________________ 01/01/94 12/26/92 01/01/94 12/26/92 __________ __________ __________ __________ Cash flows from operating activities: Net earnings $ 2,471 3,528 6,592 6,526 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 4,655 4,498 9,430 8,924 Loss reserve on closed stores (27) (23) (53) (46) Restricted stock award compensation expense 53 54 107 107 Cumulative effect of change in accounting for income taxes (900) Increase in merchandise inventories (373) (1,558) (3,954) (489) (Decrease) increase in accounts payable and accured expenses (1,014) 9,356 1,478 (4,880) (Decrease) increase in income taxes, net (1,144) (154) (309) 2,317 Other, net (931) (658) (3,308) (3,917) ________ ________ ________ ________ Net cash flows provided by operating activities 3,690 15,043 9,083 8,542 Cash flows from investing activities: Additions to property and equipment (2,402) (8,414) (5,142) (16,244) Proceeds from sale of property and equipment 10 25 42 25 ________ ________ ________ ________ Net cash used in investing activities (2,392) (8,389) (5,100) (16,219) Cash flows from financing activities: Proceeds from notes payable 4,640 6,237 5,523 11,454 Principal payments on obligations capital leases (420) (464) (827) (914) Principal payments on long-term debt (941) (1,130) (1,880) (2,261) Dividends paid (782) (782) (1,564) (1,564) ________ ________ ________ ________ Net cash provided by financing activities 2,497 3,861 1,252 6,715 Net increase (decrease) in cash and cash equivalents 3,795 10,515 5,235 (962) Beginning of period cash and cash equivalents 13,510 (154) 12,070 11,323 ________ ________ ________ ________ End of period cash and cash equivalents $ 17,305 10,361 17,305 10,361 ======== ======== ======== ======== Supplemental Disclosures of Cash Flow Information: _____________________________________ Cash paid for: Interest expenses $ 1,032 1,367 2,149 2,763 ======== ======== ======== ======== Income taxes $ 2,571 1,318 3,008 2,596 ======== ======== ======== ========
See accompanying notes to condensed financial statements. 9 DELCHAMPS, INC. AND SUBSIDIARY Notes to Condensed Financial Statements (Unaudited) (A) The condensed financial statements for the thirteen and twenty-six week periods ended January 1, 1994 and December 26, 1992 are unaudited. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary for the fair presentation of the financial position and results of operations for the periods presented have been included. Results of operations for interim periods are not necessarily indicative of results for the entire year. 10-11 Management's Discussion And Analysis Of Results Of Operations And Financial Condition The following discussion should be read in conjunction with the condensed financial statements and notes thereto included elsewhere herein. Results Of Operations Sales: _____ Sales increased 9.70% for the thirteen-week period and 7.02% for the twenty-six week period, compared with corresponding periods last year. Sales for stores open during the current and prior year periods increased 4.38% for the thirteen-week period and 2.59% for the twenty-six week period. The increase in same store sales growth for both periods was the result of increased promotional activities. These activities included featuring certain products at reduced retail prices, implementing a dish program which promoted plates and completer pieces, and introducing a line of soft drink products with Delchamps as the brand name. In addition, the Company has continued its Double Coupon Program (under which the Company doubles coupons that have a face value of up to sixty cents) and its Cash Back For School Program (under which the Company makes cash donations to schools equal to 1% of the total cash register receipts collected by each school). At January 1, 1994, the Company operated 119 supermarkets and eleven liquor stores compared with 115 supermarkets and ten liquor stores at December 26, 1992. During the thirteen-week period, the Company opened one liquor store and expanded one supermarket. During the twenty-six week period, the Company opened one supermarket, expanded three supermarkets, and opened one liquor store. Gross Profit: ____________ Gross profit as a percentage of sales decreased from 26.10% to 24.54% for the thirteen-week period and decreased from 25.52% to 25.16% for the twenty-six week period. The decreases for both periods were the result of markdowns related to the promotional activities noted above. Selling, General and Administration Expenses: ____________________________________________ Selling, general and administration expenses as a percentage of sales decreased from 23.32% to 22.79% for the thirteen-week period and increased from 22.95% to 23.13% for the twenty-six week period. The decrease for the thirteen-week period was because of increased sales volume which was up 9.70% as noted above. The increase for the twenty-six week period was because of increased expenses related to the promotional activities noted above. Other Expense: _____________ Other expense decreased $330,000 and $602,000 for the thirteen and twenty-six week periods, respectively. The decreases result form lower interest expense which was caused by the Company refinancing a significant portion of long-term debt, lower levels of indebtedness, and a decline in interest rates. Income Taxes: ____________ The effective rate for income taxes decreased from 37.18% to 34.75% for the thirteen-week period and decreased from 36.78% to 35.90% for the twenty-six week period. The effective rates decreased for both periods because of lower pretax earnings combined with greater levels of targeted jobs tax credits. The effective rates were below the statutory rate because of targeted jobs tax credits. Other: _____ During the first quarter of the current fiscal year, the Company implemented Statement of Financial Accounting Standard No. 109, "Accounting For Income Taxes" ("SFAS No. 109"). SFAS No. 109 supersedes SFAS No. 96 and requires that deferred taxes be recorded using the liability method and restricts the conditions under which a deferred tax asset may be recorded. The cumulative effect on the financial statements of adopting SFAS No. 109 was to increase net earnings $900,000. LIQUIDITY AND CAPITAL RESOURCES The Company leases its store locations, but makes substantial expenditures to equip new and expanded supermarkets. In addition, the Company makes substantial expenditures for distribution facilities and equipment. The Company plans to finance its capital expenditures with funds provided by operations. However, if an insufficient amount of funds are generated, the Company may draw on short-term credit lines. The Company has $105.0 million in credit lines from financial institutions of which $98.5 million is available for future use. These credit lines expire at various times throughout fiscal year 1994, though the Company expects most to be renewed. Working capital increased form $49,511,000 at July 3, 1993 to $54,920,000 as of January 1, 1994. Additions to property and equipment were $5,142,000 during the same period and consisted primarily of purchases of store equipment. 12 PART II. Other Information Item 6. Exhibits and Reports on Form 8-K. Reports on Form 8-K There were no reports on Form 8-K filed during the 13-weeks ended January 1, 1994. Signatures Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Delchamps, Inc. _______________ Date: February 14, 1994 /s/ Randy Delchamps ____________________________________ Randy Delchamps, Chairman, President, and Chief Executive Officer Date: February 14, 1994 /s/ Roy W. Henderson _____________________________________ Roy W. Henderson, Vice President, Finance, and Treasurer -----END PRIVACY-ENHANCED MESSAGE-----